WMC, the Wisconsin Budget, and the Absence of Truth: Part II

The Wisconsin Manufacturer & Commerce (WMC) campaign to subvert the state budget is in full swing. Last week when we posted WMC, the Wisconsin Budget, and the Absence of Truth: Part I there was more to offend reasonable people than just the erroneous "the budget proposes a 50 percent increase in taxes on retirees’ IRAs and 401(k)s."

The "50 percent increase" sounded ominous and conclusion was wrong. What WMC failed to say was this:

• Depending upon how it is calculated, Wisconsin has the second or third lowest rate of taxation on capital gains in the United States.
• The proposed modifications with the ominous sounding "50 percent" will take Wisconsin to the seventh lowest rate of taxation.
• In Wisconsin, 72% of all capital gains taxes are paid by those who are in the top 5% income bracket.

WMC recanted but we still have concerns about the disastrous course they chart for our state.

Wrapped in the flag of the small business, and lower taxes, WMC fails to provide a context to its positions. The problem begins and ends with a flawed and basic assumption contained in the original WMC edict on the matter:

And if tax hikes in the middle of a recession aren’t chilling enough to slow economic growth, the Governor’s budget is crammed with policy changes that will add to the cost of doing business in Wisconsin, and undermine our competitiveness in an increasingly global marketplace...But the alternative road would be to enact laws that add to our business competitiveness so that we can grow our way out of the recession and put people back to work. (emphasis added)

Translated into language the rest of us understand, business competitiveness means "what is good for Wisconsin business as defined by WMC." That means lower taxes, less environmental regulation, and no legislation that protects consumers and workers.  In a word, they are selfish.

WMC presents an unarticulated premise, namely that is what is good for Wisconsin business is good for the state. Sometimes that is the case, but not always.

In the hands of WMC, business competitiveness is a slogan that is selfish. The reality is they got us into this mess by straggling state revenues with unreasonable tax cuts for the wealthy that left state coffers depleted in times of need.

Comments

[Katrina]

fyi
SPEAK UP FOR A BUDGET THAT PUTS PEOPLE FIRST

What: Press conference on the importance of including both revenue enhancements and spending cuts in addressing the state budget gap.

When: Tuesday, May 19, 9:30 am

Where: State Capitol, Senate Parlor

Who: This event is sponsored by the Wisconsin Council on Children and Families, Institute for Wisconsin’s Future, Disability Rights Wisconsin, Wisconsin Counties Association, AFT-Wisconsin, and Making Work Milwaukee. (A full list of organizations expressing support will be available at the event.)

Wisconsin needs a fiscally responsible and balanced solution to the budget crisis, which ensures that vital public services are adequately funded. Closing the new $1.6 billion hole in the Wisconsin budget solely by making deeper cuts would have a devastating effect on state and local services that are more important now than ever. An all-cuts solution to the additional $1.6 billion revenue shortfall would hurt school children, newly unemployed workers and their families, older adults, people with disabilities, and low income families and children. Deep cuts would also weaken the public structures that will be vital to economic recovery.

A network of groups has scheduled a press conference on Tuesday, May 19 at the Capitol in the Senate Parlor at 9:30 am. The groups include representatives from the faith community, school districts, disability organizations, senior groups, unions and local governments. The event is intended to put a face on the potential cuts, and to call for a balanced approach that puts people first and protects vitally important human services.

There are revenue options available that could generate over one billion dollars in the next years, substantially reducing the need for further cuts. The money would be raised from taxpayers with the greatest ability to pay. Options include restoring the estate tax, taxing capital gains like ordinary income, and increasing the top income tax rate by one percentage point more than Gov. Doyle proposed for households with incomes over $300,000. If these revenue options were enacted, the funds generated would almost fill the new budget hole, put people first and protect vitally important human services.

With so many people in need, this is the worst possible time to cut services. Now more than ever, we must maintain the safety net and stay true to our Wisconsin values. Many prominent economists have noted that making cuts during a recession hurts the economy even more than carefully targeted tax increases.

Please join us Tuesday and ask our elected officials to close the budget deficit by using a balanced approach that includes revenue increases as well as cuts.

For more information, contact the Wisconsin Council on Children and Families at (608) 284-0580.

[Tax Payer]

Uh, 2009 Wisconsin Act 2 (introduced and passed in 72 hours without a public hearing!) contained $2.9 BILLION in tax increases, all of which will be spent on the pet causes of these groups. When is enough enough for these people?

[Chuck]

What's wrong with not having high taxes relative to others? Would you argue that because we're in the top half of school performance we should spend less on schools? Policy right or wrongness needs to be based on other things than keeping up with the folks next door.

[mandrake]

500 points in one day. This is unusual.